[matinthehat]

Hello,

Do these scenarios make sense?

1. Bull trap - sellers raise the price above resistance believing that they will be able to get higher prices - so the tape then shows more sellers than buyers with an increase in price - the sellers then realize that noone is buying, so down the price goes

2. Bear trap - buyers put in offers to buy at lower levels than the support - the tape shows a majority of buyers with a decrease in price - the buyers then realize that noone is selling, so up the price goes

Thanks.

edit : was in a hurry, sorry for the spelling mistake in the title

[firewalker]

You can never have more buyers than sellers, because than no transaction could take place. You can have 50 people wanting to buy a stock at $75 and 50 wanting to sell it at $80, but unless there's a mutual agreement on price, no transaction will take price. The tape is a registration of all the transactions taking place. Trades that are not filled do not appear on the tape, so by definition you can only see an equal amount of contracts bought and sold.

Originally Posted by matinthehat »

Hello,

Do these scenarios make sense?

1. Bull trap - sellers raise the price above resistance believing that they will be able to get higher prices - so the tape then shows more sellers than buyers with an increase in price - the sellers then realize that noone is buying, so down the price goes

2. Bear trap - buyers put in offers to buy at lower levels than the support - the tape shows a majority of buyers with a decrease in price - the buyers then realize that noone is selling, so up the price goes

Thanks.

edit : was in a hurry, sorry for the spelling mistake in the title